Meanwhile, Elan Waters will be launching a range of six functional water-based drinks across the Europe and the US, after a successful pilot in south-east England. The range includes one version incorporating guarana, damiana and carrot seed “to help activate the body’s natural release of energy”. It is branded by Ashley Carter Design Consultants.

At around 239m in value, the UK functional foods market is still relatively small. Across Europe it is worth around 830m. The sector has come from nowhere over the past five years and is expected to be worth 2bn by 2003, according to a recent survey by Leatherhead Food Research Association.

LFRA is a food industry organisation specialising in law, science and food markets. In its survey of nine European countries, the LFRA identified 102 functional foods and drinks. The introduction of the first comprehensive functional foods labelling code, agreed last week, looks set to expand the market beyond LFRA’s estimate (see table).

Cato Consulting managing director Emma Fric says the growing popularity of functional foods is part of a US-led move towards the integration of the health, beauty and leisure sectors.

This has seen Boots the Chemists announcing plans to set up specialist “cosmoceutical” units in 95 stores. Cosmoceutical is a US term meaning products which fall between beauty and pharmaceutical ranges.

Meanwhile, beverage giants in the US are busy adding functional – or “nutraceutical” – products to their ranges.

Starbucks is testing its Power Frappucino – a vitamin-enhanced drink containing protein and complex carbohydrates, developed as a meal replacement. Industry observers expect the chain to add a juice-based beverage-line after acquiring tea and juice manufacturer Tazo.

The US is home to the most adventurous health/leisure over-lap. Nature’s Northwest, a pilot store created by Cato Consulting in Oregon for vitamin, mineral and herb retailer General Nutrition Center, provides a glimpse of what to expect in the UK.

Launched last October, the 4000m2 store is a health and leisure complex offering a range of functional products, including groceries, cosmoceuticals, a coffee bar and a New Age music shop. US architect John Greenberg worked on the exterior.

The outlet also offers consultation on homeopathy, acupuncture and chiropody and a library on healthy lifestyles. “The complex is a multisensory experience, which combines New Age imagery with a rustic, honest, organic feel,” says Cato’s Fric.

Fric says GNC plans to roll out elements of Nature’s Northwest to its 4000-strong US chain and set up concessions in US pharmacies. It could incorporate these elements into its three London stores.

Richards has been working as the industrial representative for a new code of practice governing claims manufacturers can make about their functional foods.

The code was drawn up by the Food and Drink Federation, the Consumers Association and Lacob, the trade standards authority for food and drink industries.

Richards expects it to be implemented by the summer. “Until now there have been no specific laws to cover the health claims made by functional products. This is only a code of practice, but it has the backing of an entire industry,” he says.

Richards says the code will mean stricter policing of labelling laws, but it will also allow manufacturers to make bigger claims – without the need for a medical certificate – providing they can scientifically prove them.

The new labelling code means there should be plenty of branding work in this area in the next few years.

This is, however, a tricky area, as the failure of SmithKline Beecham’s Ribena Juice and Fibre around a year ago proves.

“I think the product didn’t communicate the health proposition effectively. It was also priced at around twice the price of the standard Ribena drink,” says LFRA manager of functional food working group John Young.

“It’s the latest way of adding real value to foods and brands. But there is a lot of information to communicate and it often has to be done subtly due to restrictions on what you can claim,” says David Goudge, director of The Brand Development Business. Goudge says he is currently doing functional-food branding work for a number of big clients.

“The real test is to reassure people that, despite being healthy, the food can taste nice. There is an assumption in this country that something can only be healthy if it is unpleasant,” says Goudge.

Functional Foods

A new code of practice for functional food labelling stipulates that: a medicine can claim to prevent, cure or alleviate a disease. A food can claim to reduce the risk of disease, where there is undisputed scientific evidence to support the claim.

Code drawn up by Consumers’ Association, Food and Drink Federation and LACOB.